Your key team when buying a home

By Gandhy.Nava@nafinc.com July 17, 2018

Getting to know all the people who will join you for all or part of your homebuying journey is like meeting new people on the first day of school or the first day at a new job. There will be a lot to process, which alternately will prove exhilarating and overwhelming.

But just as you triumphed (okay, survived) those tension-filled events, we’re confident you’ll come through the homebuying experience with flying colors, too.

However, to calm any lingering anxieties about the adventure you’re about to undertake, let’s make some early introductions so you’ll better understand who these key players are and the distinct roles they will play in helping you find and finance a home:  

Real Estate Agent

Your agent is your captain. Therefore, he or she must be knowledgeable, personable, patient, reliable, trustworthy, honest, direct, motivated, a solid negotiator and totally committed to your success.

This leader also will have his or her own network of connections and resources to serve you before, during and after the transaction – somebody who can recommend a top-notch lender or a plumber who will come out to your house at 11 p.m. on a Sunday to fix your leaky faucet.

To find such a saint, ask friends, business associates, members of organizations you belong to, and professionals in related fields that you use. Also, drop in at a few open houses in areas where you would like to live. The agents you meet will likely have a good knowledge of the neighborhood and perhaps possess exactly the qualities and style you’re looking for. Observe how they interact with clients.

When you have three strong candidates, interview each one. Ask each agent to bring along a list of every transaction they’ve been a part of in the last 12 months. You may quickly discover that the agent prefers working with sellers and not buyers.  

Additionally, ask how long they have been an agent, if they work full-time, if they have a specialty (foreclosures, short-sales, property type, etc.) and professional designations to match. If you must sell a property before buying your next one, pay special attention to how they market their properties. Do they offer professional photography (including video and drone) and staging? Ask how they will specifically market your listing.

Also inquire about their team. The last thing you want to deal with is one of their assistants who rubs you the wrong way.

From their activity sheet, also ask if you can spot-check their references, which, when you meet or call them, may trigger a new set of questions. Above all — after asking these references if their agent followed through on their promises and represented their interests to the best of their ability — ask if they would use the agent again. This is the ultimate test of customer satisfaction. Also Yelp your candidates to see what past clients are saying about them.

Buyers typically don’t pay their agent a commission, so that’s one expense you won’t incur. That’s usually the seller’s responsibility. But if you have to sell first, anticipate paying a commission between 4 and 8 percent (harder-to-market properties may justify the higher commission). There has been downward pressure on commissions owing to new real estate players entering the market.

A point of note, unlike lawyers, real estate agents don’t bill by the hour. Rather, agents do most of their work below the water line. It’s said that good agents spend at least nine hours working behind the scenes for every hour spent in the presence of clients. So, seek a busy, competent agent, but also one who has the time to serve you well.

Real Estate Broker

When you’re selecting your agent, you’re also selecting their broker. It’s a package deal. If your deal sails through, you might never meet the broker. However, should a buyer-seller dispute arise, you want to know your broker has your back and your agent’s, too, with a deep bench of business, legal and educational resources that either of you can readily access. The broker should be the acknowledged backstop of your team.

Mortgage Lender

Unless you recently hit the lottery or received an inheritance, you will likely need to finance your home purchase and thus require the services of a mortgage lender. If you have solid credit and you’re gainfully employed, lenders will knock down your door to serve you. Many homebuyers often start their search for financing with a financial institution with whom they already have a financial relationship for their checking, savings and investing.

At the same time, many homebuyers will prefer working with a mortgage broker or a mortgage banker, who specialize in home lending. Mortgage brokers are independent contractors who shop various wholesalers for the best rate and then add their mark-up for their time and trouble, whereas mortgage bankers use their own or borrowed capital to originate and service loans in their own name. Whoever you ultimately select should have the breadth of knowledge and experience to match you with exactly the right loan product for your need. Also, ask each lender you’re considering if they service their own loans. Lenders who service their own loans are often more accountable, not to mention easier to get on the phone if a mortgage payment issue or other discrepancy arises.

Property Inspector

An old real estate rule of thumb says buy the worst house on the best block, then fix it up to live in or sell. But you could be Einstein and still not be aware of all the serious defects hiding in a home. Leaky pipes, faulty wiring, defective locks, uneven floors, termite-infested siding, missing roof tiles, etc.

Any one of these defects could cost you thousands of dollars in repairs, turning what seemed a housing bargain into a bust. So, in your defense, hire a qualified inspector who will examine your potential home from foundation to roof. Members of the American Society of Home Inspectors (ASHI) must have performed 250 property inspections to earn that designation, so the organization is a good source for referrals. Your real agent will likely be another source but remember that many home inspectors rely on agents for business, so there could be a conflict of interest. Lastly, home inspections aren’t intended to be X-rays of your home so out-of-view hazards like mold or asbestos may require calling in a specialist if you suspect these health threats exist.

Escrow Officer

If your broker is your backstop, your escrow officer is the umpire, the neutral third party that receives and disburses money or documents for the primary transacting parties.  They are the bridge that gulfs the natural distrust between buyer and seller. Strictly speaking, they’re not on anybody’s team, but you need a good one on yours to ensure every detail of every transaction is buttoned up correctly to everyone’s satisfaction. Real estate is a document-driven enterprise, where every “I” needs to be dotted and every “t” crossed!

Financial or Tax Advisor

A home is an asset, like stocks, bonds or precious metals. If you’re buying one, you need to understand how a home purchase will impact your overall finances. If you’re selling, you need to know, among other things, if the sale will trigger a taxable event, such as a capital gain. The sooner you can integrate your advisor into your team the better; otherwise you could be paying more than your fair share of taxes.

Attorney

You may need a lawyer who specializes in real estate, not your next-door neighbor who handled your divorce.  Their input will not be needed in every transaction, but it’s good to know you have one ready to come off the bench when his or her expertise is needed.

***

Buying a home often involves a team of professionals. The more you know about who’s on your team at the outset and the specific role each member plays, the more confident you’ll feel about finding and financing a great home.


Read more at https://www.newamericanfunding.com/blog/when-youre-buying-a-home-youre-also-buying-a-team/#mUcCBKIUYWq5GW12.99

Your key team when buying a home

By Leo.Rosete@nafinc.com July 17, 2018

 

 

 

Getting to know all the people who will join you for all or part of your homebuying journey is like meeting new people on the first day of school or the first day at a new job. There will be a lot to process, which alternately will prove exhilarating and overwhelming.

But just as you triumphed (okay, survived) those tension-filled events, we’re confident you’ll come through the homebuying experience with flying colors, too.

However, to calm any lingering anxieties about the adventure you’re about to undertake, let’s make some early introductions so you’ll better understand who these key players are and the distinct roles they will play in helping you find and finance a home:  

Real Estate Agent

Your agent is your captain. Therefore, he or she must be knowledgeable, personable, patient, reliable, trustworthy, honest, direct, motivated, a solid negotiator and totally committed to your success.

This leader also will have his or her own network of connections and resources to serve you before, during and after the transaction – somebody who can recommend a top-notch lender or a plumber who will come out to your house at 11 p.m. on a Sunday to fix your leaky faucet.

To find such a saint, ask friends, business associates, members of organizations you belong to, and professionals in related fields that you use. Also, drop in at a few open houses in areas where you would like to live. The agents you meet will likely have a good knowledge of the neighborhood and perhaps possess exactly the qualities and style you’re looking for. Observe how they interact with clients.

When you have three strong candidates, interview each one. Ask each agent to bring along a list of every transaction they’ve been a part of in the last 12 months. You may quickly discover that the agent prefers working with sellers and not buyers.  

Additionally, ask how long they have been an agent, if they work full-time, if they have a specialty (foreclosures, short-sales, property type, etc.) and professional designations to match. If you must sell a property before buying your next one, pay special attention to how they market their properties. Do they offer professional photography (including video and drone) and staging? Ask how they will specifically market your listing.

Also inquire about their team. The last thing you want to deal with is one of their assistants who rubs you the wrong way.

From their activity sheet, also ask if you can spot-check their references, which, when you meet or call them, may trigger a new set of questions. Above all — after asking these references if their agent followed through on their promises and represented their interests to the best of their ability — ask if they would use the agent again. This is the ultimate test of customer satisfaction. Also Yelp your candidates to see what past clients are saying about them.

Buyers typically don’t pay their agent a commission, so that’s one expense you won’t incur. That’s usually the seller’s responsibility. But if you have to sell first, anticipate paying a commission between 4 and 8 percent (harder-to-market properties may justify the higher commission). There has been downward pressure on commissions owing to new real estate players entering the market.

A point of note, unlike lawyers, real estate agents don’t bill by the hour. Rather, agents do most of their work below the water line. It’s said that good agents spend at least nine hours working behind the scenes for every hour spent in the presence of clients. So, seek a busy, competent agent, but also one who has the time to serve you well.

Real Estate Broker

When you’re selecting your agent, you’re also selecting their broker. It’s a package deal. If your deal sails through, you might never meet the broker. However, should a buyer-seller dispute arise, you want to know your broker has your back and your agent’s, too, with a deep bench of business, legal and educational resources that either of you can readily access. The broker should be the acknowledged backstop of your team.

Mortgage Lender

Unless you recently hit the lottery or received an inheritance, you will likely need to finance your home purchase and thus require the services of a mortgage lender. If you have solid credit and you’re gainfully employed, lenders will knock down your door to serve you. Many homebuyers often start their search for financing with a financial institution with whom they already have a financial relationship for their checking, savings and investing.

At the same time, many homebuyers will prefer working with a mortgage broker or a mortgage banker, who specialize in home lending. Mortgage brokers are independent contractors who shop various wholesalers for the best rate and then add their mark-up for their time and trouble, whereas mortgage bankers use their own or borrowed capital to originate and service loans in their own name. Whoever you ultimately select should have the breadth of knowledge and experience to match you with exactly the right loan product for your need. Also, ask each lender you’re considering if they service their own loans. Lenders who service their own loans are often more accountable, not to mention easier to get on the phone if a mortgage payment issue or other discrepancy arises.

Property Inspector

An old real estate rule of thumb says buy the worst house on the best block, then fix it up to live in or sell. But you could be Einstein and still not be aware of all the serious defects hiding in a home. Leaky pipes, faulty wiring, defective locks, uneven floors, termite-infested siding, missing roof tiles, etc.

Any one of these defects could cost you thousands of dollars in repairs, turning what seemed a housing bargain into a bust. So, in your defense, hire a qualified inspector who will examine your potential home from foundation to roof. Members of the American Society of Home Inspectors (ASHI) must have performed 250 property inspections to earn that designation, so the organization is a good source for referrals. Your real agent will likely be another source but remember that many home inspectors rely on agents for business, so there could be a conflict of interest. Lastly, home inspections aren’t intended to be X-rays of your home so out-of-view hazards like mold or asbestos may require calling in a specialist if you suspect these health threats exist.

Escrow Officer

If your broker is your backstop, your escrow officer is the umpire, the neutral third party that receives and disburses money or documents for the primary transacting parties.  They are the bridge that gulfs the natural distrust between buyer and seller. Strictly speaking, they’re not on anybody’s team, but you need a good one on yours to ensure every detail of every transaction is buttoned up correctly to everyone’s satisfaction. Real estate is a document-driven enterprise, where every “I” needs to be dotted and every “t” crossed!

Financial or Tax Advisor

A home is an asset, like stocks, bonds or precious metals. If you’re buying one, you need to understand how a home purchase will impact your overall finances. If you’re selling, you need to know, among other things, if the sale will trigger a taxable event, such as a capital gain. The sooner you can integrate your advisor into your team the better; otherwise you could be paying more than your fair share of taxes.

Attorney

You may need a lawyer who specializes in real estate, not your next-door neighbor who handled your divorce.  Their input will not be needed in every transaction, but it’s good to know you have one ready to come off the bench when his or her expertise is needed.

***

Buying a home often involves a team of professionals. The more you know about who’s on your team at the outset and the specific role each member plays, the more confident you’ll feel about finding and financing a great home.

 

Mortgage Rundown: June 21st, 2018

By Amber.McDonough@nafinc.com July 9, 2018

Mortgage Rundown: June 21, 2018


Today we are going to talk about what’s happening in the capital markets.

Last week was another FOMC meeting where they raised the Fed Funds rate to the range of 1.75 to 2.0%, in what was a widely anticipated move.  The attention now shifts to the meeting in September with the market pricing in an 81% chance the Fed moves rates for a third time this year.  Also, there is now a 50% chance the Fed raises rates a fourth time in December.

Turning to the Treasury market, the 10yr is holding below 3% and is currently trading at 2.92%.  The constant public sparring over tariffs has the market somewhat concerned about the possibility of a slowdown, which is keeping mortgage rates lower.  One major item to watch closely is the spread between the 2yr and 10yr Treasury, often referred to as the shape of the yield curve.  It’s running dangerously low at 0.35%.  That’s the lowest it’s been since 2007, right when the Fed started their campaign of lowering interest rates to stimulate the economy.

On the inflation front, CPI is running around 2.2% year-over-year and PCE is still below 2.0%, currently at 1.80%.  The graph on your screen shows both of those indices over time and you will notice that PCE is still below 2%.

Speaking of indices, the S&P Case Shiller home price index recently came out and showed that home prices continue to climb.  The graph on your screen shows the trend of home prices over the past 10 years in 20 major metropolitan areas.  Home prices are now up 55% nationally since February of 2012.

 

image: http://www.newamericanagent.com/uploads/images/Home_price_index.jpg

Home Price Index

 

In the coming weeks you should keep an eye on the following items:

  • First and foremost is the stock market and the trade disputes.  Will the economy keep roaring ahead and leave the door open for the FOMC to continue to raise rates.
  • Also, the shape of the yield curve; will the 2yr rise above the yield on the 10yr, which has been a great prognosticator of recessions.

Tips on Buying a Home in a Seller's Market

By maria.yabut@nafinc.com June 25, 2018

 

Buying a home in a sellers market

Have you decided to buy a home? One of the challenges you may face will not just be finding a home you like, but also beating out all the other home buyers who like it and want to make an offer on it, too. Check out this latest infographic for tips on how to buy in a seller's market.

sellers market



New American Funding Ranked a Top Mortgage Lender in America by Scotsman Guide

By paul.pritchard@nafinc.com June 8, 2018

TUSTIN, Calif.June 5, 2018 /PRNewswire/ -- For the sixth year in a row, national mortgage lender New American Fundingmade Scotsman Guide Top Mortgage Lenders list. The California-based company was ranked among entries from hundreds of mortgage companies across the country in the following categories:

-        Top Overall Volume: #15 
-        Retail Volume: #9

To view Scotsman Guide's residential rankings visit:

https://www.scotsmanguide.com/Rankings/Top-Lenders-2017/

Scotsman Guide, the leading resource for mortgage originators, created its 6th annual listing based on loan data from 2017. They ranked each company according to mortgage volume on residential properties that are up to four units and located within the U.S.

"To be recognized as one of the nation's top lenders for the 6th year running – as long as Scotsman Guide has been publishing these rankings – confirms the dedication and consistent hard work our more than 2,800 employees put forth every day to produce great loan experiences for all our borrowers and real estate partners," said CEO Rick Arvielo.

"It shows how our efforts across every division of the company to expand home ownership opportunities are truly making a difference. I'll also remember 2017 for the mobilization of our sales force. Our LOs embraced many new technologies to perform tasks and services in the field that they once could only do in the office," Arvielo explained.

2017 Highlights

  • Generated more than $10.1 billion in loan volume
  • Funded 38,550 loans.
  • Grew retail branch network to more than 145 nationwide locations and 2,600 team members
  • Added more than 30 retail branches and over 500 employees.

Recent Awards

The company has received several notable accolades including:

  • Inc. 5000 Fastest Growing Companies – Five appearances on list
  • Top Mortgage Companies in America – Mortgage Executive Magazine
  • Stevie® American Business Awards - Company of the Year - Financial Services - Large

About New American Funding

New American Funding is a national mortgage banker licensed in 48 states with approximately 160 branch locations that offer a variety of home loan options including: Conventional, FHA, Cash Out, Fixed Rate and Adjustable Rate Mortgages, VA, HARP 2.0, Jumbo, and Reverse Mortgages. The company is a Fannie Mae, Freddie Mac and Ginnie Mae Direct Seller/Servicer, FHA Direct Endorsement, and VA Automatic mortgage lender.

The Driving Force Behind Mortgage Rates

By Josh.Nardi@nafinc.com May 21, 2018

mortgage rates infograph

New American Funding Wins Gold Stevie® Award for “Company of the Year”

By paul.pritchard@nafinc.com May 11, 2018

 

For a third consecutive year, New American Funding has received multiple Stevie® American Business Awards, including a Stevie® gold as “Company of the Year.”  The prestigious awards annually recognize the achievements of businesses and working professionals throughout the U.S.

After receiving more than 3,700 nominations from organizations across the country, the Stevie® judging committee honored New American Funding with the following awards:

Gold:

New American Funding - Company of the Year - Financial Services - Large

Silver:

Rick Arvielo - Executive of the Year - Financial Services

Patty Arvielo - Woman of the Year - Consumer Services

New American Funding Marketing Department - Marketing Department of the Year

Bronze:

Branding Campaign - Marketing Campaign of the Year - Financial Products & Services

“We are honored to receive these outstanding accolades,” said New American Funding COO Christy Bunce. “To be recognized as an industry leader across so maHomny different categories is a tribute to all of our employees and the hard work they put in each day to make homeownership attainable.”

The judges commended New American Funding for its “excellent community involvement” and “excellent demonstration of strategy and attention to employee, brand and training innovations,” and noted the company’s Glassdoor ratings were “very impressive.”

“This company truly shows that it is a good business model with the amount that it has grown in the last year,” the judges remarked. 

Over the past year, New American Funding has been recognized with several notable accolades including a gold Stevie® for Employer of the Year in Financial Services and Inc. 5000 Fastest-Growing Private Company in America.

The Stevie® trophies will be presented during an awards ceremony in New York City on June 11. 

To see the complete list of this year’s winners, please visit: http://stevieawards.com/aba/2018-stevie-award-winners


Read more at https://www.newamericanfunding.com/about/newsroom/new-american-funding-wins-gold-stevie-award-for-company-of-the-year/#HbQggco7oQ3LqFyW.99

First Time Homebuyers: If You Have the Will, There's a Way to Homeownership

By Ryan.Whitmore@nafinc.com May 2, 2018

You hear almost every day, especially from millennials and first-time homebuyers, that’s it’s almost impossible to buy a house today.  And while it’s true that wages are struggling to keep up with housing prices, it wasn’t necessarily a picnic for your parents or grandparents either to purchase a house when they were just starting out. While it’s true the average house ran about $25,000 back in 1970, the average salary then was about $6,000 a year. In other words, that house your mom or dad bought then cost roughly 4x their average annual salary.

Now, let’s jump to 2018. Bowing to the ease of using round numbers, let’s say the average household pulls in about $100,000 a year. Those are two people living together who make $50,000 each.

And for argument’s sake, let’s say this couple is seeking to buy a home (okay, a condo in Los Angeles) for about $500,000, or about 5x their annual household income.

Here’s the point: You likely had to scrimp and save to buy a house in 1970, and you will likely have to do the same -- or even save and work a little harder -- in 2018, but buying a house wasn’t impossible then and it isn’t now, if that’s truly your goal.

Level the playing field

In fact, you might be able to level the playing field with the 1970s, if you take advantage of new laws and programs that weren’t available decades ago. Back in the day (the 70s), for example, nearly everyone came up with a 20 percent down payment. Today, you can get away with down payments as little as 3 percent. And there are some programs, like Veterans Administration (VA) loans and others, that offer 100% financing. Indeed, 81 percent of Americans purchase their first home with less than 20 percent down.

So, you would be in good company. While, in an ideal world, it would be nice to come in with a large down payment to reduce the size of your monthly mortgage, it’s good to know, especially in an appreciating market, you may still get your foot in the door if you’re short on cash and unable to make the traditional 20 percent down payment. 

On a $500,000 home that you might have your eye on, a 20 percent down payment would mean you would have to come up with a $100,000 down payment. Coming in at only 3 percent, however, means you would need only $15,000. That’s a big difference — an $85,000 difference!

If you’ve got parents or simply friends who like you enormously, they could donate to your housing cause by making a tax-free gift up to $14,000. Actually, your mom could gift you with $14,000 and your dad could donate the same for a grand total of $28,000. But wait, there’s more. Your significant other’s mom and dad could do the same for another $28,000, bringing your gift total to $56,000. That’s real money.

Of course, not everyone has bankable parents or other reliable parties waiting in the wings to donate to their housing cause, no matter how noble, but, at least, the option is there.

At this point, it’s important to make the following disclaimer: If you come in with less than a 20 percent down payment, many lenders -- who have relationships with Fannie Mae, Freddie Mac and other government agencies and investors to whom they sell their loans to generate cash so they can make more loans -- will require that you have some skin in the game. In other words, your down payment can’t come entirely from a gift.

However, if you come in with more than 20 percent, your entire down payment contribution could come from a gift.

Co-Signers to the rescue

Moving on, you could also ask mom and dad to co-sign the mortgage with you. If they have a solid credit score and assets, your ability to obtain a mortgage would increase significantly. About a quarter of all loan originations on single-family homes occur this way. In Los Angeles, co-borrowers listed on the mortgage or deed of trust recently topped 30 percent. Of course, if you miss a payment, your co-signers’ credit could be dinged, or, worse, if the mortgage payments stop altogether, the lender will come looking for mom and dad or whoever else you persuaded to cosign. 

If there are no family or friends with deep pockets to help you out, reach into your own pockets. Consider pulling from your 401(k) or IRA assets. Some 401(k) plans let you borrow up to the lesser of $50,000 or 50 percent of your 401(k) balance. Raiding your retirement fund might slow your accumulation of retirement assets, so, again, you have to establish your priorities and ask yourself, am I willing to take a hit against my retirement savings to obtain a house now. After all, even though many 401(k) plans require that you pay yourself back, the time your money is absent from your account is time your retirement savings won’t be growing. 

First-time homebuyers (and that usually means you haven’t owned a house in the last three years) can also tap an IRA up to $10,000 without early withdrawal penalties.

Additional help

If none of the above options are available to you, or you just don’t want to go there — meaning you don’t want to hit up your parents or temporarily derail your retirement progress — you might turn to government programs for help. Many federal, state and local programs offer grants or special loans to help you come up with the down payment.

And if you’re planning your marriage, there’s no shame to start a “wedding registry,” where you indicate, not so subtly, that cash is even more welcomed than blenders and bedsheets.

So, if you want a house, you’re going to have to scrape together your nickels and dimes the way previous generations did — and perhaps work even a little harder than they did — but you also have new avenues that didn’t exist a generation ago to help you become a homeowner.

There’s no glossing over all the obstacles, real and imagined, that first-time homebuyers face, but with persistence and a solid plan of attack, you can do it.

Talk to a reputable lender experienced in successfully dealing with a multitude of financial scenarios about your goal to become a homeowner. Also, consult your accountant, tax adviser or mortgage lender for the most current tax rules, laws, strategies and tactics that may apply to your situation.

It doesn’t cost a penny to talk to a knowledgeable knowledge lender, so use your resources.

Lastly remember, if you have the will, you’ll find the way!

Credit Card Reduction: Take Charge of Your Debt

By Dylan.Tortarolo@nafinc.com May 2, 2018

Any day is a good day to reduce your outstanding balances. This is especially true given that most American workers’ take-home pay recently rose as new, lower tax brackets took effect. For many, it has freed up the cash needed to start reducing their credit card debt. Here's how even this small amount can be used to make a big difference.

Achieving a Better Balance

Start by taking inventory. Determine how many different creditors you owe and the outstanding balances you carry from month to month. Then, note the interest rate you are charged on each. Once you have this information, you can start addressing your credit card debt.

Two popular and effective debt repayment strategies are the Snowball and Avalanche methods. With the Snowball strategy, you focus on paying off the smallest balance first, and then shift your attention to the card with the next-smallest balance. You achieve small victories quickly, which can help keep you motivated.

The snowball method also works if you’re just trying to pay off one credit card balance. In this case, you pay what you can reasonably afford above the minimum payment and keep paying that amount as your overall balance decreases each month. Over time, the amount of interest will shrink, and more of your payment will go toward repaying the balance.

The Avalanche strategy involves directing more of your funds toward the credit card with the highest interest rate until it's repaid. Then, you shift that payment amount to the card with the next-highest interest rate. If you have several cards, you eventually achieve an avalanche of payments, speeding up the repayment process.

Regardless of which strategy you choose, here are some suggestions to help you stay in repayment mode.

4 Tips for Keeping Yourself on Plan

1. Take a hard look at your credit card statements. When you pay your credit card bill each month in full, charging lunches and lattes has no added cost. Once you begin carrying balances, however, each charge starts accruing interest expenses. Ask yourself if you really need to be paying a finance charge on your gum and shampoo purchases.

2. Do the math when contemplating a purchase, especially when it’s on sale. Stop and think about how long it will realistically take you to pay it back if you use your credit card and what that means in terms of the additional interest expense. Chances are you’ll save more money in the long run by waiting until you can purchase the item outright, preferably at on sale at a future date.

3. Keep yourself accountable by not adding to existing debt. Leave your credit card at home or restrict yourself to cash only when you go to the store so you don’t have an easy way to pay for unplanned purchases. When at-home shopping tempts, keeping your credit card in a hard-to-reach spot, like a shoebox in the back of the closet, makes it harder to give in to impulse purchases.

4. Stay on track by making consistent payments. As your reduction program takes hold and you see your monthly credit card balance begin to retreat, refrain from increasing the outstanding balance to its previous levels.

Credit card debt allows many of us to experience and achieve things we would have delayed for another time, sooner. Forming a strategy for paying off those purchases and sticking to it still allows you to enjoy them while making future purchases more affordable.

The All-Cash Offer: Does Showing Sellers the Money Make Sense?

By Jonny.Moore@nafinc.com May 2, 2018

A sure way of attracting the attention of a seller, especially in a hot housing market, is to make an all-cash offer. After all, it eliminates any suspense about your ability to close the deal. It also tends to fast track the transaction, which many sellers find attractive. However, while it is clearly advantageous for sellers, it may not make the most sense for you once you take ownership.

How Mortgages Benefit Financial Goals

While owning a home free and clear of a mortgage may be appealing, many cash buyers end up mortgaging their properties after they close. The reason: It often helps achieve more of their financial goals.

4 Ways Mortgages Benefit Borrowers

1. May Help Optimize Tax Deductions: Given that interest paid on a mortgage is tax deductible in most cases, having mortgage interest can help maximize a homeowner’s deductions. This can be especially beneficial for those in higher tax brackets. Be sure to consult a tax professional for advisement.

2. Can Enhance Liquidity: Retirees often add a reverse mortgage to their homes to boost their income. Additionally, a reverse mortgage line of credit can be used to ensure borrowers have ready access to money for any high-expense repairs, medical costs, or other purposes.

3. Enables Wealth to Accumulate: A mortgage provides a homeowner with access to a large chunk of money that can be used to invest in other assets. From a side business to an investment portfolio, the money may boost returns , especially if it produces a source of income. It also enables the homeowner to diversify across a wider variety of markets and create a liquid reserve to ensure against possible repairs and expenses.

4. Capitalizes on Borrowing Capability: Borrowing when income and credit ratings are high is less costly than borrowing when money is actually needed. For instance, borrowers who decide to enter a second career later in life or who transition to self-employment may face higher borrowing costs when they apply for a loan. Those who already have a mortgage and have used it to build savings to meet future goals, could potentially save on their interest expense in the long run.

Competing Against an All-Cash Offer

As attractive as a cash offer is to a seller, you needn’t feel as though it is your only option as a buyer. Having a preapproval letter from your Loan Officer and verification from your financial institution that you have an account with a balance that covers the down payment can also set a seller’s mind at ease. This is particularly true if your offer is a little higher than the all-cash offer.

Being able to provide sufficient flexibility to accommodate the seller’s preferences regarding a closing date can also influence an acceptance in your favor.  With emotions so closely tied to a long-time family home, writing a letter to persuade a seller that you would make a good caretaker has also been known to seal the deal.

Whether you decide to make an all-cash offer or are determined to compete against one, be strategic about it. As nice as owning a home free and clear sounds, make sure it serves your personal financial goals and circumstances first.